Tuesday, May 26, 2009

What a day!

The market really got ahead of itself today. I was very sure that market would go down today. Judging from the up volume vs down volume, the block trades were mostly to the downside and yet the market went up big time. Obviously the big boys were selling in the rally. This says to me that some of the big boys eg Goldman Sachs et al had much to unload. This unloading kept going till around 2:00 Eastern time and then it slowed a bit. I watched money flow at the site: http://online.wsj.com/mdc/public/page/2_3022-mflppg-moneyflow.html. They update market data every hour and for volume on the downtick was way higher than the volume on the uptick all day long on SPY. This was complete opposite of what happened on Friday. I am so sick of such flagrant manipulation of the stock market. It makes me sick and want to leave stock market and instead buy me a rental property instead or maybe start my own business, anything but this totally manipulated market. The volume of trade that Goldman Sachs and couple of other big investing firms do is astounding and they are able to dictate when the market will be brought down and when the market will be made to rally. They jammed the market initially to give themselves higher price to exit the sale side of the trade. I just don't get it: who is buying in this market? I can see buying for dividend. That totally makes sense. Actually, if you buy 100 shares of VZ at $30 and sell 100 shares of VZ puts st30 Dec 09 you would get $600. Cost for your 200 shares will be at most 6000-600 = 5400. You will get 8% yield on your 200 shares almost for ever since VZ, although heavily loaded with debt, is not going to go bankrupt - too big to fail? So, I do get the buying for dividend. But where is the proof that economy is going to turn the corner? Today's excuse was just ludicrous and they all know it. The consumer "hopes" to see a better future for himself but his is not seeing it in his life now. What kind of logic or excuse is that for a monster rally with below average volume? You can't even short this market because you don't know how much more these big guys need to make before they are done. And why would they be done if they are raking in all this money everyday? I believe the rally will not end utill the money managers of pension funds and other small investors actually run out of their investing money. Only after the big boys have suckered these people in and there is no one left to buy, then they will leave the market to its device. I wish common folks invested their money in an index fund and I wish there were no money managers to eat into your savings. How can these money managers be so easily manipulated? I just don't get it.

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